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How will Brexit re-shape the construction industry?

View profile for Peter Allen
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With negotiations underway to establish the basis of the UK’s separation from the EU, there will be a daunting array of subject matter to be discussed and agreed on before the clock strikes twelve.

Nearly every industry will be affected by the consequences of our conscious uncoupling and few more so than the construction industry.

The most predictable effect of a deal that restricts free movement of workers to our country will be a shortfall in the skills and workers that are required by the construction sector. It is an industry that has always relied heavily on foreign workers to bridge the gaps in domestic skill sets and provide cost effective support on projects. Immigration is inevitably going to be a spiky topic in the negotiations and it is important that our government is able to agree a system that minimises any harm on the construction industry’s ability to recruit the best people for the job. The cost of finding and training people to fill in the residual gaps will not be a cheap exercise after all, however the recent leak of the government’s proposal for our immigration system post-Brexit suggests this consideration is not at the top of their list.

The sector will also inevitably feel the consequences of no longer trading without borders in the EU. The Department for Business Skills and Innovation has previously estimated in a 2010 report that 64% of building materials used in the UK were imported from the EU and that 63% of building materials produced in the UK were exported to the EU. The potential imposition of new duties, tariffs or taxes on this trading relationship could lead to a drop in profits in the short term and an increase in the prices of projects in the longer term as the additional cost gets passed on to clients, unless viable alternative opportunities are opened up in place with other nations.

The extent to which our government will choose (or be allowed) to deviate from existing EU trading and health and safety standards remains to be seen, and whilst they will have the power to repeal or replace the laws mandated by the EU after Brexit, it is likely that any subsequent trade arrangement with the EU will oblige us to comply with those same standards. The reduction in red tape in the construction industry might not be as extensive as was first hoped.

I am based at our Chelmsford Office and can be reached on 01245 453813 or email peter.allen@birkettlong.co.uk